US citizenship renunciations at highest levels on record
Official figures published in the US Federal Register show that 5,816 renunciations were recorded in the period, a thirteenfold increase on the six months to December 2019. The level is already nearly three times the number of renunciations in the whole of 2019.
Americans must pay a USD2,350-government fee to renounce their citizenship, plus an exit tax on their worldwide assets. Those based overseas must renounce in person at the US Embassy in their country, and may even have their renunciation rejected if they are thought to be doing it for tax reasons.
The numbers of US nationals renouncing have been in decline since 2017, and the latest figures signal a sharp reversal in the trend since the COVID-19 emergency struck. Alistair Bambridge, Partner at Bambridge Accountants, says: ‘the current pandemic has allowed individuals the time to review their ties to the US and decide that the current political climate and annual US tax reporting is just too much to bear.’
American citizens living abroad are still required to file US tax returns each year, potentially pay US tax and report all their foreign bank accounts, investments and pensions held outside the USA, says Bambridge. 'For many Americans this intrusion is too complicated, and they make the serious step of renouncing their citizenship as they do not plan to return to live in the US', he said.
However, Marylouise Serrato, Executive Director of American Citizens Abroad, commented to Newsweek that the numbers ‘probably indicate a backlog from renunciations that were in process in the later part of 2019,’ pointing to the fact that the COVID-19 outbreak will have exacerbated the already ‘significant time requirement for anyone wanting to renounce their citizenship.’
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